Saturday, September 26, 2009

Smartmoney: Your Health Plan's "Dr. No"

Angie Marek writes a very good article for Smartmoney about utilization review in insurance companies - where the companies basically ration care. Conservatives have made noise about the government using health reform to ration care. Insurance companies do it already.

Smartmoney profiles Dr. Don Liss, a former internist who is now a medical director for Aetna. He basically decides by remote if patients' doctors are over-treating their patients. There are about 1,000 medical directors nationwide, and they get little respect from their former colleagues.

But playing bad cop has earned medical directors their share of enemies over the years. At the height of the HMO era in the early 1990s, they denied coverage so frequently—and hounded doctors so often with scorecards comparing their costs with their peers’—that doctors came to see them as antagonists and tormentors. Some directors testified that they got bonuses if they denied more doctor bills. While insurers say those specific practices have long since stopped, physicians in the field remain frustrated with the system; some refuse even to refer to their counterparts on the insurance side as “doctors.” It doesn’t help that as medicine grows more specialized, many of the doctors evaluating claims have backgrounds in primary care (as is the case with eight out of 12 of the members of Liss’s team). “How do you even argue necessity with insurers,” says prominent Los Angeles orthopedist Ralph Gambardella, “if the only time a joint surgery is truly ‘necessary’ is when you’ve got a bone sticking out of your skin?”

After 12 years with Aetna, Liss has gotten used to being on the front lines of this battle. (Even, occasionally, at home: Liss’s wife is a primary-care doctor.) Over the years, he’s had to say no in various tough calls, involving mental health care, injury rehab and more, though he says all those rulings were medically justified. Recently, Liss says, he traveled to New Jersey to defend Aetna’s decision to stop covering home nursing care for a child. He describes the girl as a “neurologically devastated 6-year-old” who was “cute as a button” and “clearly needs care day and night.” But as Liss told her family and its lawyer, because her seizures had lessened recently, Aetna believed that a parent or nanny—instead of a $150,000-a-year nurse—could handle tasks like feeding the child through the tube in her stomach. The family’s reaction, says Liss, was “businesslike.”

There's a flip side to utilization review. Medicine is extremely complex, and doctors are the ones who help the rest of us navigate the system. Patients usually take doctors at their word. Unfortunately, there are financial pressures on doctors, and a general fascination in American culture with technology. In sociology, the latter phenomenon is known as the technological imperative - if something can be done the old way or with a shiny gadget, you must use the gadget. As a result, doctors often use aggressive, high-technology treatments. This drives up the cost of healthcare.

Of all the medical-cost battlegrounds, none are hotter than the ones centered on technological breakthroughs, which generate headlines and hopes long before they become standard practice. For insurers, keeping up with the advances is no easy task. That’s why Liss makes frequent visits to places like the University of Pennsylvania’s proton-beam radiation center, a new facility with a $140 million price tag. During a two-hour tour with other Aetna brass, Liss got a close look at the center’s cyclotron, a particle accelerator bigger than a football field, and listened to a presentation by a guide who spoke of the machine as a game-changing innovation in cancer care. Indeed, many doctors think proton beams could be ideal for treating tumors near the eye or spine, since they do less damage to surrounding tissue than traditional radiation. Prostate-cancer patients want the treatment too, since it may help them avoid complications like incontinence.

But Liss sees two nagging issues here: For most cancers, the medical community is still debating the effectiveness of proton-beam treatment, and it typically costs four times as much as traditional radiation. Aetna staff are continually churning out bulletins outlining the evidence behind new and controversial treatments like this. So Liss was shocked when, at the end of his grip-and-grin outing, a Penn official said the university hoped to put about half their radiation patients through the center by 2012. “I walked out of there a whiter shade of pale,” Liss recalls. (Stephen Hahn, chairman of radiation oncology at the university, says the center will be “prudent” about which patients get the therapy.) Liss says it’s his job to make sure such big-ticket spending has enough evidence to back it up. “You hope at least on the margins you bring some sanity,” he says.

In other words, utilization review is necessary as one thing that can put the brakes on healthcare spending. We need to do it more transparently, and we need to make sure the insurers are using good data to do it.

Medical directors say they’re the ones who can apply the brakes to runaway spending, by monitoring the relevant science and data to decide what kind of care is the most effective. Indeed, even their critics say medical directors are becoming more important players. “We’re all headed for a health care train wreck if things don’t change,” says Shannon Brownlee, senior fellow at the New America Foundation and author of Overtreated.

Single-payer advocates, like President Obama's family physician, Dr. David Scheiner, accuse the insurers of "screwing it up" by interfering with clinical decision making. They say that Medicare for all would be better, but in fact, Medicare doesn't do utilization review well enough. The Medicare Payment Advisory Commission (MedPAC) often makes recommendations to cut reimbursements for procedures it feels don't add value, but Congress ignores or overrides them.

Going forward, comparative effectiveness research will be a key piece of the puzzle in making transparent which treatments are effective and which aren't. As things stand, the insurers' medical directors may be using internal studies on comparative effectiveness that the public doesn't have access to; for example, Kaiser Permanente, a very well-regarded non-profit insurer and hospital system, is known to have and use a bunch of internal data. Alternatively, medical directors or patients' physicians may be basing their decisions on clinical trials. However, the FDA trials only compare treatments to placebos. They do not generally put treatments or medical devices head to head. Comparative effectiveness research would do that.

The American health system rations care today, mostly by ability to pay. It does so inconsistently and non-transparently. It needs to ration care more, more consistently, by fairer criteria, and more transparently. During the debates on the stimulus bill, which inserted funding for comparative effectiveness research, the Republicans tried to insert amendments prohibiting that research from being used by government insurers (Medicare, Medicaid, the Veterans Administration, and possibly the Indian Health Service) to make coverage decisions. The fact of the matter is that private and public insurers need to use CER as one basis for coverage decisions, although they need to keep in mind that not all patients are the same.

One last word about medical directors. The article notes that consumers often appeal denials to state insurance commissioners. In 2006, the most recent year for which figures are available, about 41% of denials were reversed upon appeal. Appeals are costly and stressful, but there is currently a way to introduce some transparency and oversight into the private system. I do not think that Medicare currently has a similar process. In fact, when the Centers for Medicare and Medicaid services decided not to pay for spinal fusions in Medicare on the basis that they weren't generally an effective treatment, specialty physicians appealed directly to Congress, which reversed that decision. Congress is generally captive to moneyed interests, like specialty physicians. It should not be allowed to micromanage Medicare in this fashion. Additionally, it might be a good idea to subject Medicare to state insurance oversight to give consumers a better, more targeted appeals process.

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